U.S. Grain Users Test for Corn Toxin as Drought Spurs Mold

Grain elevators and milk processors are testing for a corn toxin that can be fatal to livestock and cause cancer in humans after the worst Midwest drought in 56 years spurred an increased risk of contamination.

Iowa, the largest U.S. corn producer, has ordered milk processors including Dallas-based Dean Foods Co. (DF) to screen for the toxin in raw milk received at state processing plants beginning tomorrow. Many grain companies are testing every load farmers deliver for the fungal disease that produces aflatoxin, according to Chip Flory, the editor of the Professional Farmers of America agribusiness newsletter in Cedar Falls, Iowa.

Aflatoxins, chemicals produced by mold fungi, are considered carcinogenic to animals and humans, according to Iowa State University. Conditions are prime for the fungus to produce toxin during warm August nights in a period of drought, according to a document on the University’s website. Corn prices climbed to a record this month as hot, dry weather scorched fields.

“The markets are worried about the problem, but we just don’t know how widespread or concentrated the mold is in the Midwest,” Flory said in a telephone interview. “We need to get more of the crop harvested” before being able to assess the scope of the contamination, he said.

Flory, who toured fields in Iowa, Minnesota, Nebraska and South Dakota last week, said he saw evidence of the mold in about 13 percent of the samples he took from more than 60 fields. Testing grain is a challenge because the mold can appear in highly variable levels within a field, and the presence of mold does not necessarily lead to aflatoxin, Flory said.

Livestock Feed

The Food and Drug Administration doesn’t allow corn containing aflatoxin in concentrations of greater than 20 parts per billion for human consumption or for use in feed for dairy animals or for immature livestock of other species. Corn containing aflatoxin at 100 parts per billion or less can be used in breeding cattle and swine and mature poultry, while corn with 300 parts or less can be used in finishing beef cattle.

“We were well aware that aflatoxin could be an issue this year due to the historic drought conditions,” Bill Northey, Iowa’s secretary of agriculture, said in a statement on Aug. 28. “Now that farmers are starting to harvest silage, and corn in some cases, it is appropriate to begin this screening process to make sure our milk supply remains safe.”

Iowa Request

On Aug. 15, Iowa’s Department of Agriculture submitted a request to the FDA to allow for corn containing restricted levels of the toxin to be blended with not-contaminated grain for used in animal feed. The agency has granted a similar request in previous years.

U.S. corn production will drop 13 percent from a year earlier because of the drought, the Department of Agriculture estimates. Futures on the Chicago Board of Trade fell 0.6 percent today to $8.085 a bushel after touching a record $8.49 on Aug. 10.

There have been several reports of aflatoxin detected in southern Iowa and also a few reports from central Iowa, Alison Robertson, a plant pathologist at Iowa State University in Ames, said in a report this week. Levels of aflatoxin ranged from 8 parts per billion to almost 200 parts, Robertson said.

Strict regulations and testing of finished foods and feeds should prevent a major health scare, and human exposure to high levels of aflatoxin is rare, according to Mark Tarter, the general manager of Effingham Equity Ag Services, a 91-year-old cooperative based in Effingham, Illinois.

Effingham Buyers

“We are fortunate that we have a diverse agricultural base of animal production to sell corn,” Tarter said. “We will be railing in corn from other areas of the country by early next year” to make up for yields that were cut as much as 75 percent by the drought this year, he said in a telephone interview.

The Effingham buyers have rejected two loads of corn for exceeding the 300 parts per billion level of aflatoxin this year in an area about 200 miles south of Chicago where drought has been the most severe in the state, Tarter said. About 72 percent of all the corn the company has bought tested below the 20-parts threshold, he said. The cooperative separates the corn to maintain quality for animal feed sales.

“People are hopeful that aflatoxin will be an isolated problem,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “So far the mold has been less widespread than the grain trade has feared.”

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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